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Best practices of Performance
Management in IT industry
AKHIL MAHAJAN
ABHAY DUGGAL
VIJAYENDRA BAWASHALU
CHANDNI CHADHA
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Issue :IT organizations are being challenged to assure that their projects / activities
(1) Are aligned with overall strategic goals and business objectives.
(2) Deliver promised results on time and within budget.
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What is the performance management
issue for IT organizations?
Many senior managers believe that IT organizations are:
wasteful and inefficient (as evidenced by chronicproject cost overruns, late deliverables, etc.)
not aligned with strategic goals and businessobjectives.
Senior management is often handicapped in its decision-making for IT because it has difficulty determining
if the most important strategic and business needs
are being met if they have been presented with the best IT options
for decision-making
the appropriate funding levels for IT projects /activities (how much to budget)
whether the IT organization is likely to deliver the
promised benefits and results on time and withinbudget
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Performance information that most ITorganizations lack relates to the non-technicalaspects of the job; the information that can tell
IT and senior management whether:
IT projects / activities are progressing as planned
there are telltale signs of future performanceproblems
there are troubled projects / activities thatrequire higher managements intervention, or
actions already taken to correct problems actuallyworked.
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Three of the concepts underlying
performance management
organizations "management system
performance measures
performance metrics
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How does non-technical IT
performance management work?
Preparatory steps forperformance managementinitiatives include:
Definition of the overallanalytic framework
Formulation ofimplementation plans
Assignment of analyticresponsibility, staff andmanagement training
conceptual design of thenecessary supportingsystems applications.
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Once the foundation is established,
performance management involves a
number of recurring steps: Gather performance data on those variables of
interest to IT and senior management.
Analyze the data to determine normal (baseline)levels.
Determine appropriate performance thresholdsfor each important variable; exceeding athreshold indicates a problem worthy ofattention (e.g., achievement of a major projectmilestone is 30 days, or more, behind schedule)and possibly action.
Periodically (often monthly) monitorperformance variables for deviations fromestablished thresholds (a.k.a., variances). Whena performance threshold is exceeded (e.g.,vacant PC support staff positions increases to10% when the acceptable vacancy threshold is
3%), analysts identify a variance and determineits significance
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How does non-technical IT
performance management work?
Simulations
Trend analysis
In-depth performance reviews
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To help assure the success of a
performance management initiative:
understand managements information needs
have a clear picture of what you are trying to achieveand how you will do it
involve people who have actually established andmanaged performance management systems
study what other organizations are doing - learn whatworks and what doesnt
manage expectations - make sure all key participantsunderstand and agree on what will be accomplishedand when
use a limited pilot to gain experience (in other words,
confine your mistakes to a small area that you can fixquickly), and demonstrate early results
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IT Performance Management - How
to get startedMeasuring performance isn't easy; too often,performance measurement initiatives falter because:
those charged with planning and implementing theinitiative had little or no prior experience withperformance management and measurement (often,
with the best of intentions, they repeat common,predictable, and sometimes fatal mistakes)
managements information needs were not identifiedin advance, and a well-thought-out conceptualframework and implementation plan was notdeveloped (in one case, after a years work, the first
performance report was submitted to seniormanagement two months late; the designers were told"this is not the information we need to see")
too much performance information materialized toosoon (the organizations capacity to assimilate,interpret, and react to it was overwhelmed)
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Five Things You Should Know Before
Undertaking An IT Performance
Management Initiative
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1. Performance management
improvements are often implemented
in concert with other managementimprovements
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2. Improvements take time and
sustained management commitment
3 Ad b d
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3. Adequate resources must be made
available
design and maintenance of the process
development of management and staffknowledge and skills
dedication (eventually) of staff to perform thenecessary analyses
acquisition, or development, of the technology tocapture and store large amounts of current andhistorical data
changing budgeting practices and procedures,along with budgeting systems capabilities
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4. The IT organization will need to
learn new management techniques
Performance management can yield
knowledge and information about the
organisation.
The ability to pinpoint potential, and actual,
performance problems
It will also require a more businesslikeapproach to IT project and activity planning,
control, and reporting.
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5. Some of the approaches
recommended in current literature
can be risky. performance management and measurement
are sophisticated management tools that canyield significant benefits to the organization
some current publications reveals that quite afew are based more upon academic theory thansolid implementation experience.
The moral: Evaluate the source before youact upon the advice.
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